MDM - Model switches to Neutral, July 27, 2011

Published : July 27 2011 at 15:21 ET

In this trendless environment that characterizes much of 2011, the model has switched back to neutral. The agreement on raising the debt ceiling will likely be reached before the deadline, but counting today, that still is 5 trading days away. Enough selling pressure has hit the model to push it into a neutral signal. These are headline news driven markets which make for added risk since no trending consistency has been achieved so far this year, a frustrating year for many indeed, and a year that goes down in history as one of the most challenging if not the most challenging.

We continue to hold partial positions in the precious metals as there remains ample indication that plenty of tailwinds will push them higher in the long run. There also remains tailwinds on the side of stocks, but over the short term, stocks could fall further or remain trading in a choppy volatile manner.